Trade Me Property says the Auckland housing market has gone mad, with average asking prices up 3.5% in one month

Trade Me Property says the Auckland housing market has gone "mad," with the average asking price for Auckland homes listed for sale on the website hitting $773,350* in three months to June.

In the rest of the country (everywhere excluding Auckland) the average asking price was $404,550 in the three months to June.

The average asking price for Auckland homes has increased by $130,950 (20.4%) in the 12 months to June, while for the rest of the country the average asking price increased by just $13,950 (3.6%) over the same period.

The head of Trade Me Property, Nigel Jeffries, said the country clearly had a two speed property market.

"The Auckland Effect is casting a huge shadow over the residential property market as a whole as it continues to go mad," he said.

"The fact that the average asking price in Auckland has increased ten times faster than the rest of the country makes it clear that New Zealand property can no longer be thought of as a single market: it's Auckland on one hand and the rest of New Zealand in the other."

The average asking price in Auckland rose by $25,000 between May and June, giving a 3.5% increase in a single month.

"The record books are changing constantly in Auckland and it shows no slowing down. This is the tenth consecutive month of record highs for the city," Jeffries said.

But outside of Auckland it was a different story, with the average selling price declining by 2% between May and June.

The average asking price for stand along houses in Auckland was $834,300 in the three months to June, compared to $412,050 for the rest of the country, which means on average a house in Auckland is just over twice as expensive as the rest of New Zealand.

The average asking price for a stand alone house was $456,350 in Wellington and $478,850 in Christchurch.

The average asking price for other types of homes in Auckland (apartments, units and townhouses) was $560,000 in the three months to June, compared to $350,600 in the rest of the country, $379,000 in Wellington and $387,050 in Christchurch.

*Trade Me Property's quoted asking prices are a three month rolling, 80% truncated mean, which excludes the upper and lower decile prices.


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69 Comments

When you have TMP making such a strong comment and they have such a strong interest in the market place then you have to worry about where all this is going to end. As they say when the bell boy is giving you a tip on the share market it is time to sell your shares.

So do you still think the younger generation just need to work harder and study harder, travel less, live at home, to buy a house in Auckland, or has your view changed Gordon?

Cellphones... don't ever forget the cellphones!

Yes and they need to drink less and probably cut back on the drugs they consume.

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Exactly! If they cut back the $15 they spend on beer each week they could easily keep pace with the $3000 per week gain in house price.

It's not about the amount of money they will save. It's about gaining the discipline that they lack. The rest will follow as they become more disciplined and productive...

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Actually it is about the amount of money needed. Try again.

Probably some are turning to drugs with the current state of affairs

If they sell enough drugs that can be a way into an ordinary 3-bed suburban house. Selling P is quite profitable. And guess where those profits have been going.

So if we could just get offshore buyers buying P instead of property.....

Too bad the trade's in the other direction.

Frazz you all should have got a better education and then jobs and then you would be feeling a bit better than you obviously are now. I could have retired under 50 years of age because I started saving at 28 years of age and saving money beyond the mortgage repayments. And I still had nice cars and overseas travel with the family. Never been much of a drinker or eaten out regularly at restaurants I have to admit.

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I received a great education thanks Gordon, difference is I paid for mine, whilst you spent 7 years taxpayer funded to get yours. How about repaying that $1000's back to a young couple who are paying of a student loan and saving for a deposit? Typical Boomer head in the sand as National flog off the assets which your generation did not pay for, and allow Auckland to be sold off to the highest bidder.

You are in a great mood today Frazz. Obviously your great education has not got you a well paying job like so many today who study for qualifications that are not sought after by employers. By the way I did pay fees for each year of study and my parents could not help me so I worked over the summer for the next years expenses. No overseas trips over summer.

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Rubbish Gordon, you paid probably $300 to $400 tops per year and left University debt free, crikey you really take the cake. Probably best to get back to your retail empire and ZB talk back. Own my own company which uses top selling NZ accounting software...and who's angry...thought we were having a conversation?

Your anger confirms your frustration over having a useless job which means you are being left behind. You were not having a conversation Frazz. You were attacking boomers.

So is this ridiculous denial of the big picture wilful ignorance or petty vindictiveness?

Boomer entitlement syndrome?

There certainly should be a name for it.

I like it when they co-opt other people's experiences, like claiming they deserve special treatment because of the War and Depression.

Some of us bloody well deserve being attacked

Timely article in the Herald...

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1148...

"So when we look at Generation X, we see a very different picture than the shaggy-headed slacker caricature of the 1990s. We see a generation that has put in lots of extra hours to eke out income gains, mortgaged much of its future to get an education, and seen its savings hammered.

In other words, we see a bunch of hard-working, future-oriented people who have been treated badly by the job market, the education market, the housing market and the stock market.

If I were a Gen Xer, I would wonder if maybe I shouldn't have slacked off after all."

gees talk about making a statement when the house bolted years ago and most here could see the train wreck it is going to cause

Not to mention the fox guarding the hen house.

Fox guarding the Kiwi house.

Dragon guarding the Kiwi house...?

Lower interest rates, speculator restrictions coming October, the Chinese now outed as devouring everything, the government asleep at the wheel, rumours of money tsunamis. All this is the so called winter slowdown.

How much worse are they going to let it get without doing anything?

How much worse are they going to let it get without doing anything?

Never, I repeat never, underestimate the incompetence or corruptibility of the (inter)National Party!

To do anything now would be to concede they were wrong - and to reinforce Winston Peters was right, and for voters to realise how easily they were led

Wonderful...

So they're going to fall back on their stupid ideology rather than doing what's right for New Zealanders. Inspirational governing!

well .. gee whizz .. the voters voted for them just 9 months ago - who should you blame

The populace and MSM outlets?

no

Their conventional wisdom is what is good for them (the nats) is good for New Zealand

Here's a hypothetical question for you

If the real-estate whistle-blowers and leakers who have come out now had come out before the last election do you think there would have been a different result?

yes because the GC tax scared off voters, it made me stay away from labour and i very nearly voted for them this time as i could see the damage their bad policies were doing ( would have been the first time)

Indeed. I have done so several times.

The colossal blunder was to give several months notice of the new LVR and tax rules to come in September.
Now every man and his dog is climbing in before they take effect.
I predict that the market will rise even higher before the new rules come in, and then pause as they are digested, only to continue upwards once everyone has worked out how to get around them.
And remember most of the market is unaffected by either Mums and Dads buying and selling without restriction, or by those who can raise the money in any event.

Blunder? I'd say obviously intentional.

Is the increase not due to fewer sales at auction and more being listed with a price post auction?

(Given the guide prices for auctions are generally well below actual sale prices).

Could well be an indication of the beginning of the end?

Rents stable to falling at the same time prices soar - the issue is not supply it is simply demand from Chinese investors and speculators.

A foreign power is controlling our economy.

if you restricted overseas buying the prices would drop overnight as locals would stop trying to compete and more rational thought would come into play around purchase price

Our falling dollar just made everything much cheaper for overseas buyers

It won't matter once they are banned from buying....only questions are how soon and how well implemented it will be. Done properly there won't be many ways to get around restrictions. Nationals hand will be forced as the data rolls in and Auckland keeps inflating.

The solution is simple.

In Auckland restrict buying rental property to NZ citizens only. No students on student visas, permanent residents or anything like that. Permanent residents should only be allowed to buy one house that they live in as a primary residence. Foreigners should be restricted from buying any house in Auckland at all unless there is an extremly good reason. An intention to move here should not be that reason.

Also require the origin of the funds for the purchase be disclosed. If the NZ citizen did not earn the cash or prove where it came from, no purchase should be allowed. NZ banks should only be allowed to take NZ income or income directly earned by the purchaser to lend money. ie if an overseas associate is paying a NZ Citizen to purchase rental housing for them, this income should be disallowed.

A very tight regime would put the fairness back in the market and clear out the foreign money and associated speculation that there is an endless stream of foreign money coming.

With the wonders of modern technology you would have to ask if the geniuses in Wellington have ever thought to check every payment of rent assistance paid to an Auckland based WINZ client and cross-check it to the property-owner and see if that owner possesses an IRD number - and see how much of it goes overseas

Well, if the owner were to put the rental income into his savings (for example) a fair bit of it would go overseas, to be invested in overseas shares and other assets such as any well-balanced portfolio ought to contain.

Or he might use it to buy goods imported from overseas, in which case the money would again go overseas.

Or he might use it to invest in a New Zealand investment opportunity, or buy goods from a New Zealand manufacturer, if he thought those offered good value for money.

A Kiwi landlord might do any of these with the rental income. So might a foreign owner. And how is any of that any of the Government's business?

Forking out welfare to landlords and most especially foreign ones is very, very much govt's business

Zombie says: once they are banned from buying

When does that happen? The proposed controls don't ban anything

I would have thought it was clear from my wording that I am making a prediction....now the wheels are in motion they won't stop until foreigners are banned.

A few months after election time 2017 would be my prediction.

Remove the foreign specufestors from the market and what happens to the the market? It's already too big to fail.

This is true. My purchasing power from the UK has jumped 20% in the last two months. But I am afraid, very very afraid of the Auckland bubble.

It's accelerating
Australian property brokers cash in on Chinese stock market turmoil as Chinese buyers "double down"

Australia's property brokers are cashing in on China's stock market calamity.

The almost $US4 trillion rout is fuelling demand for less volatile assets in one of China's favourite real-estate markets, where a plunging Australian dollar is making property cheaper for offshore investors. Chinese developers last month snapped up most of the 15 (development) sites in and around Melbourne sold by CBRE Group - five times the property broker's usual monthly tally. The bulk of the deals were sealed after the Shanghai Composite Index started tumbling. They're doubling down, said Mark Wizel, a senior director for CBRE in the city. There's been a genuine acceleration for the past three weeks

http://www.smh.com.au/business/markets/chinese-stock-market-australian-p...

From Nigel Stapleton in the same article:

"Past returns are where someone else made money," he said. "You don't want to be the last man in."

If the loonie lefties who post on this site got their way they would ban everything and everyone foreign from buying anything and totally forget about existing trade deals and treaties.
But in case they had forgotten, the same foreigners who they want to ban, could retaliate and look elsewhere for their milk and meat.
NZ isn't the only producer in the world.

Foreign house buyers are banned or restricted overseas. NZ isn't the only produced, and we are finding that out now the hardway. Many of the kiwifruit in US, doesn't actually come from NZ for instance, yet they still call them 'kiwis'

interesting history there,
we imported them from china then our government research turned them into the much nicer kiwifruit
farmers started planting like mad and everyone was in the gold,
then somebody decided they could make a quick buck for themselves by selling the seeds and cuttings overseas so chopped the knees out from the industry here
those on the far right would call that free market forces
me i call it stupid and greed to sell down the rest of your country so you can make a quick buck
so what is the difference now with those marketing auckland houses to foreign investors

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I'd rather have the loonie left, who are looking after the interest of most New Zealanders, than the rampant right, who are looking only after their own interest (and don't seem to care how many people and families get hurt in the process, and as a result).
.

The things is with the looney left they make it look like they have the interest of most NZ'ers.....and their decisions affect the whole damn nation and then the right is left paying it off again and that places the right as actually looking after the interests of everyone and the left...well they just don't get how they caused the harm in the first place!

um, The last Labour Govn paid off which govn's generated debt?
um, the last Labour Govn tried to pay forward for the BBs retiring thus avoiding (some) future debt and it was stopped by which Govn?

The right is left paying it off? Where have you been for the past 10 years?
Labour left the finances of the nation looking quite healthily, it's the nats who've squandered it all and are flogging everything off to line their own and their mates' pockets.
They've given tax cuts to the rich, and increased the tax burden on the poor.
They've weakened collective bargaining (90 days trial periods), they've introduced zero hour contracts, they've sold off the majority of the nations assets.
They've strangled Auckland and Auckland Council when we've been trying to do something about transport, they've sat back and watched house prices inflate, and have only reluctantly admitted there is a problem when public opinion starts to turn against them.
They are irresponsible with money.
They are, in fact, incompetent and should never have been left in charge of a nation.
.
if you seriously can't see this, you are either stupid, or naïve (and I'm sorry I don't like name calling, but if you vote national you have been having a direct impact on the quality of my life, and I'm bloody angry)
.

Agreed DFTBA. My life also among most of our citizens. They are a despicable bunch who deserve to be thrown out for willful incompetence and corruption. And those who voted for them should hang their heads in shame.

Yep they held power in the boom years of 2003-07, then created massive liabilities for themselves, or as it turned out National, in their last year's promises to try in an attempt to stay in power for another term - good job, obviously well disguised from some

I wasn't championing Labour....just pointing out that labour left the books in better order than the Nats have them in, now.
.
And what has National done to make life better for New Zealanders?
They're about to sign the TPPA
They've cut the top tax rate
They've increased GST
They've sold 49% of SOEs
They've mismanaged the Auckland housing market

They seem to be unconcerned NZ is being sold odd, piece by piece, they're making future governments serfs to foreign corporations....
How can any sane person be in favour of all this, or think it is a good outcome?

DFTBA - "The facts are somewhat different. Having spent taxpayers' money like a drunken sailor to stay in power, Labour left office in 2008 with surplus having turned to deficit through the combination of a domestic downturn and the global financial downturn.National had barely got its feet under the Cabinet table before the Treasury further revised its forecasts and projected deficits of $6 billion-plus.

So much for "careful management". "

http://m.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10762347

See my comment to Grant A

yet they managed to increase on that deficit on year one and haven't looked back.
I chuckle when people try to tell me the national party are better money managers than labour. history proves that is bunkum, Muldoon think big running up a huge debt, RR mother of all budgets forcing NZ into one of its worst recessions. this one will go down with loading of a debt mountain on our future generations to pay with very little to show for it
labour are not that good either except they have done some goods things evey now and then
I will give credit to Cullen for setting up his superfund and a big dunce hat to English for not funding during the prime buying opportunity especially when returns were quadruple and borrowing interest rates at the time were next to nothing
and before you say he would of had to borrow to invest and built up more debt,
he borrowed to give me money back via tax cuts would I have preferred that or setting up the country to fully fund my super in the future I pick the future
when he did that I thought im glad I don't follow his example on money management I would be living under a bridge

the problem is us the taxpayer have to live with the consequences in future years once they are long gone

You take a reasonable position to an extreme in order to discredit it, that isnt supportable. China has $ export restrictions, I wonder really if their Govn will care and even might like it that we have stopped being a destination for such illegal activity.

How is that milk price doing again that those wonderful free trade agreements are supposed to be protecting. Lower that production cost yet? If only National didn't encourage all our cows to be in the one basket.

The horse has already bolted, and it is now too late to do anything that is not going to take a long time to filter through. I think unless there is a big bubble burst, possibly causing a bank to fail, it will be a slow deflation over 10-15 years, as house prices in Auckland stagnate. If you compare it to Wellingotn, Wellington prices haven't gone anywhere since the GCF, yet it is a great place to live.

Key will only talk 'supply' solutions and that is a serious blunder. Supply considerations have to be considered with demand.
We are a tiny place in a huge world. Auckland's trauma is created by demand from outside New Zealand. The demand is such that even doubling supply can be overwhelmed dozens of times over.
This disaster for the young citizens will be his legacy

In Hawaii, he won't care.